ILLUSTRATION 4 Firm X & Co. consists of partners A and B sharing Profits and Losses in the B ratio of 3: 2. Firm Y & Co. consists of partners B and C sharing Profits and Losses in the ratio of 5:3. On 31st March, 2015 it was decided to amalgamate both the firms and form a new firm XY & Co., wherein A, B and C would be partners sharing Profits and Losses in the ratio of 4:5:1. BALANCE SHEETS (as at 31-03-2015) Liabilities X & Co. Y & Co. Assets X & Co Y & Co. Capitals: Cash in Hand/Bank 40,000 30,000 1,50,000 Debtors 60,000 80,000 B 1,00,000 75,000 Stock 50,000 20,000 50,000 Vehicles 90,000 Reserve 50,000 40,000 Machinery 1,20,000 Creditors 1,20,000 55,000 Building 1,50,000 4,20,000 2,20,000 4,20,000 2,20,000 Following were the terms of amalgamation: (i) Goodwill of X & Co. was valued at $75,000. Goodwill of Y & Co. was valued at $ 40,000. Goodwill account Not to be opened in the books of the new firm but adjusted through the Capital accounts of The partners. (ii) Building, Machinery and Vehicles are to be taken over at $2,00,000. $1,00,000 and $3,74,000 respectively, (ii) Provision for doubtful debts at $55,000 in respect of X & Co. and $74,000 in respect Y & Co, are to be provided You are required to: (0) (ii) Show, how the Goodwill value is adjusted amongst the partners. (ii) Prepare Balance Sheet of XY & Co. as at 31-3-2015 by keeping partners Capitals in their profit sharing ratio by taking capital of 'B' as the basis. The excess or deficiency to be kept in the respective Partners' Current accounts